Correlation Between Public Service and Lerøy Seafood
Can any of the company-specific risk be diversified away by investing in both Public Service and Lerøy Seafood at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Public Service and Lerøy Seafood into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Service Enterprise and Lery Seafood Group, you can compare the effects of market volatilities on Public Service and Lerøy Seafood and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Public Service with a short position of Lerøy Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Service and Lerøy Seafood.
Diversification Opportunities for Public Service and Lerøy Seafood
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Lerøy is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Public Service Enterprise and Lery Seafood Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lery Seafood Group and Public Service is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Public Service Enterprise are associated (or correlated) with Lerøy Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lery Seafood Group has no effect on the direction of Public Service i.e., Public Service and Lerøy Seafood go up and down completely randomly.
Pair Corralation between Public Service and Lerøy Seafood
Assuming the 90 days horizon Public Service is expected to generate 3.52 times less return on investment than Lerøy Seafood. But when comparing it to its historical volatility, Public Service Enterprise is 2.83 times less risky than Lerøy Seafood. It trades about 0.05 of its potential returns per unit of risk. Lery Seafood Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Lery Seafood Group on September 12, 2024 and sell it today you would earn a total of 347.00 from holding Lery Seafood Group or generate 369.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Service Enterprise vs. Lery Seafood Group
Performance |
| Timeline |
| Public Service Enterprise |
| Lery Seafood Group |
Public Service and Lerøy Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Service and Lerøy Seafood
The main advantage of trading using opposite Public Service and Lerøy Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Service position performs unexpectedly, Lerøy Seafood can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Lerøy Seafood will offset losses from the drop in Lerøy Seafood's long position.| Public Service vs. Lery Seafood Group | Public Service vs. MUTUIONLINE | Public Service vs. Austevoll Seafood ASA | Public Service vs. VARIOUS EATERIES LS |
| Lerøy Seafood vs. Mowi ASA | Lerøy Seafood vs. LEROY SEAFOOD GRUNSPADR | Lerøy Seafood vs. Yihai International Holding | Lerøy Seafood vs. Lery Seafood Group |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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